Correlation Between Bank of America and Blockchain Coinvestors
Can any of the company-specific risk be diversified away by investing in both Bank of America and Blockchain Coinvestors at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Bank of America and Blockchain Coinvestors into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank of America and Blockchain Coinvestors Acquisition, you can compare the effects of market volatilities on Bank of America and Blockchain Coinvestors and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Bank of America with a short position of Blockchain Coinvestors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Blockchain Coinvestors.
Diversification Opportunities for Bank of America and Blockchain Coinvestors
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bank and Blockchain is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Blockchain Coinvestors Acquisi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blockchain Coinvestors and Bank of America is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Bank of America are associated (or correlated) with Blockchain Coinvestors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blockchain Coinvestors has no effect on the direction of Bank of America i.e., Bank of America and Blockchain Coinvestors go up and down completely randomly.
Pair Corralation between Bank of America and Blockchain Coinvestors
Considering the 90-day investment horizon Bank of America is expected to generate 1.24 times more return on investment than Blockchain Coinvestors. However, Bank of America is 1.24 times more volatile than Blockchain Coinvestors Acquisition. It trades about 0.17 of its potential returns per unit of risk. Blockchain Coinvestors Acquisition is currently generating about 0.07 per unit of risk. If you would invest 4,044 in Bank of America on August 31, 2024 and sell it today you would earn a total of 733.00 from holding Bank of America or generate 18.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 90.48% |
| Values | Daily Returns |
Bank of America vs. Blockchain Coinvestors Acquisi
Performance |
| Timeline |
| Bank of America |
| Blockchain Coinvestors |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Modest
Bank of America and Blockchain Coinvestors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Blockchain Coinvestors
The main advantage of trading using opposite Bank of America and Blockchain Coinvestors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Blockchain Coinvestors can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Blockchain Coinvestors will offset losses from the drop in Blockchain Coinvestors' long position.| Bank of America vs. RLJ Lodging Trust | Bank of America vs. Aquagold International | Bank of America vs. Stepstone Group | Bank of America vs. Morningstar Unconstrained Allocation |
| Blockchain Coinvestors vs. Nok Airlines Public | Blockchain Coinvestors vs. American Airlines Group | Blockchain Coinvestors vs. Saia Inc | Blockchain Coinvestors vs. JetBlue Airways Corp |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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